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2019 (4) TMI 1512 - AT - Income TaxDisallowance of VAT expense - allowable expenses u/s 37 - Sales Tax / VAT Demand pertaining to financial years 2005-06 to 2011-12 - CBDT Circular Nos. 496/25.09.1987 & 674/29.12.1993. - HELD THAT:- Demand has been paid by the assessee in different installments over AY 2012-13 to 2014-15 and claimed as deduction in impugned AY u/s 43B and u/s 37(1). The deduction of amount of ₹ 253.18 Lacs has already been allowed by the revenue during assessment proceedings itself and therefore, there is no dispute with respect to deduction to that extent. The payment of the demand is also not in dispute since the assessee has already placed on record proof of payment during assessment proceedings. Therefore, the payment made by assessee during AY 2014-15 but before due date of filing of return u/s 139(1) was clearly covered by the provisions of Section 43B. Both the lower authorities, in our opinion, fell in error, to observe that the aforesaid liability pertained to FY 2013-14, which is not the case here. Upon perusal of demand notices and copies of challans, we have already noted that demand pertained to earlier several financial years. This being the case, the conditions of Section 43B were fulfilled and the assessee was eligible to claim the deduction of ₹ 224.34 Lacs as per the judgment rendered in Allied Motors (P) Ltd. Vs. CIT [1997 (3) TMI 9 - SUPREME COURT] . So far as the deduction we find that this payment also pertains to earlier several financial years. The Ld. AO denied the same primarily on the ground that the assessee failed to demonstrate that the deduction thereof was not claimed in preceding AY 2012-13. Upon perusal of financial statements for AY 2012-13, we find that the assessee has claimed an expenditure of ₹ 31.82 Lacs only in that AY and therefore, this deduction was not claimed in earlier AY, as alleged by AO. With a view to fortify this fact further, the assessee has placed on record an affidavit of one of the directors of the assessee company which would dispel the apprehensions raised by Ld. AO. Therefore, considering the factual matrix, this deduction was allowable to the assessee u/s 37(1). - Decided in favour of assessee.
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